In 2012, GNP in constant prices increased by 1.8% compared with 2011.

Transcription

1 8 Economy In 2012, GNP in constant prices increased by 1.8% compared with The building and construction sector fell by 7.7% in value added terms in 2012 compared to Manufacturing industry decreased by 0.3% in value added terms in 2012 compared to 2011, while the value added of the distribution, transport, software and communication sector decreased by 0.6% in Public administration and defence fell by 6.3% in value added in 2012 while the remaining services sectors increased by almost 3%. Investment in fixed capital formation decreased by 54% compared to five years ago and by 1% in the last year after allowing for price changes. A surplus of 7,250m was recorded in the current account of the balance of payments in 2012.

2 Contents Introductory text 131 Table 8.1 Table 8.2 Gross Domestic Product (GDP) and components at current market prices 136 Index numbers of Gross Domestic Product and expenditure aggregates at constant market prices 137 Table 8.3 Main economic aggregates 138 Table 8.4 Gross Value Added at constant factor cost by sector of origin and Gross National Income at constant market prices (chain linked annually and referenced to year 2011) 139 Table 8.5 Expenditure on Gross National Income at current market prices 140 Table 8.6 Table 8.7 Expenditure on Gross National Income at constant market prices (chain linked annually and referenced to year 2011) 141 Net Current Income and Expenditure of Central and Local Government 142 Table 8.8 Balance of International Payments: Current and Capital Accounts 143 Table 8.9 Balance of International Payments: Financial Account 144 Table 8.10 International Investment Position detailed data 145 Table 8.11 Direct investment abroad by location of investment 146 Table 8.12 Direct investment in Ireland by location of investor 147 Table 8.13 Indices of Gross Value Added per person in each region at basic prices Statistical Yearbook of Ireland

3 Introduction This chapter contains information on the performance of the overall economy and on Ireland s transactions with the rest of the world. The details are drawn from the reports on National Income and Expenditure (NIE), reports on Household Incomes at Regional and County Level and Regional GDP as well as the regular Balance of Payments statements. Estimates from these reports are provided at current and at constant prices. The impact of inflation is eliminated from the tables at constant prices and they indicate the real or volume changes in the various aggregates over time. At present, the constant price tables are chain linked annually and referenced to year The annual NIE report contains details of the main economic aggregates such as Gross Domestic Product (GDP) and of their components. Information is given on personal consumption, capital formation (investment) and on the transactions of the government sector classified according to national accounting conventions. These main aggregates are important for a number of EU administrative purposes. In particular, the level of GNP determines a major share of Ireland s contribution to the EU budget while the ratio of government debt and deficit to GDP are important Maastricht criteria. Table 8.1 shows the long run development of GDP, GNP and their main components since It also contains the aggregates at current market prices. The corresponding index numbers at constant prices (base 2011 =100) are given in Table 8.2. An additional set of aggregates for the years 2007 to 2012 are given in Table 8.3 while Tables 8.4 to 8.7 provide various breakdowns of GDP over the same period. The CSO s Balance of Payments collection and compilation system was completely overhauled in the late 1990s in order to meet the demands of the European Central Bank (ECB) and other international users. Results from 1998 were published in 2000 and updated regularly since then, those for 2010, 2011 and 2012 being presented in Tables 8.8 and 8.9. The current account details in table 8.8 provide detail on the exports and imports of services and on the components of income inflows (credits) and outflows (debits). Table 8.10 shows the end of year stocks (or levels) of Ireland s foreign assets and liabilities, ie the International Investment Position. A breakdown by type of investment is included. Table 8.11 gives geographical details for 2010 and 2011 of Ireland s foreign direct investment abroad (ie outward direct investment) showing both the flows (transactions) during the year and the end of year positions (stock levels). Table 8.12 shows the corresponding flows and stocks for inward direct investment in the two years. Some information is also provided in this chapter on the economy at a regional level. Regional Accounts are produced annually by CSO and provide estimates of Gross Value Added (GVA) for the two overall NUTS-2 regions and the eight Regional Authority NUTS-3 regions while household income estimates are provided on a county basis. GVA per capita is one of the principal concepts used in determining eligibility for EU structural funds. GVA differs from household income in that it includes the profits of companies operating in a region, a considerable amount of which may accrue to non-residents. In addition, the workforce contributing to the GVA in a region may live in and bring their Statistical Yearbook of Ireland 131

4 incomes home to a neighbouring region where they will be counted in the household income estimates. The Mid-East region (Kildare, Meath and Wicklow) and the Dublin region are affected by a substantial proportion of their workforce living in one region and commuting to work in another. This increases the GVA of the Dublin region to which most of the commuting takes place. It is more meaningful to combine these two regions when analysing GVA. The main results on regional GVA are summarised in Table Personal income also includes items such as social welfare benefits which are not included in GVA. Details of personal income by county are available on the CSO website or in the CSO s annual release on County Incomes and Regional GDP. Long term growth Gross Domestic Product (GDP) is a measure of the value added generated in the production of goods and services in the economy. Over the years between 1970 and 2012, the value of GDP increased by a factor of over seventy. Increases in price levels played a major role in this increase but when the price effects are removed the increase was more than five fold. Gross National Product (GNP) is a better measure than GDP of the value added accruing to residents of the country. In Ireland, GNP is now considerably lower than GDP because of outward income flows to non-residents, especially profits and dividends of foreign direct investment enterprises. GNP is now around 80% of the value of GDP. In 1970, the reverse was the case with GNP higher, because of income flows to Irish residents from abroad. As a result of this turnaround, GNP growth has been somewhat slower than GDP growth. Since 1970, real GNP has increased about four times. In the most recent year 2012, GNP increased by 1.8% following a decrease of 1.6% in the previous year. The growth in exports has been especially noticeable. Since 1970, the value of exports has increased almost by a factor of thirty in real terms. (Imports, of course, also increased greatly, by a factor of sixteen). The other demand components making up GDP have increased to a lesser extent over the same period e.g. personal consumption about four times and public expenditure and investment about three times. Sectors of economy recent trends The experience of the various sectors of the economy has been very different in recent years. Between 2010 and 2012, the output of Industry increased by 3.3% in constant prices. The output of the building industry decreased by 21% during these two years. The output of the manufacturing sectors dominated by multi-national companies (Chemicals and pharmaceuticals, Computers and instrument engineering, and Medical and dental instruments and supplies) increased by more than 10%. There was a decrease of 0.2% in the output of the Distribution, Transport, Software and communications sector during the same period. Agriculture, forestry and fishing output decreased by 13.9% in real terms between 2010 and Statistical Yearbook of Ireland

5 Consumption and investment Personal expenditure between 2010 and 2012 increased in nominal or current prices by 0.5% while in real terms it decreased by 1.8%. Investment (fixed capital formation) in construction, machinery and equipment and other fixed capital assets decreased by 9.6% in nominal or current prices and by almost 11% in real terms between 2010 and As a result, the total value of fixed capital investment has now been reduced to 17,434m in Regions - Gross Value Added Indices of GVA per person for the regions are shown in Table Relative to an average of 100 for the State, output per head in the Dublin (NUTS-3) region, as measured by GVA at basic prices, was highest at in The GVA per head for the combined Dublin plus Mid East region was of the state average. The corresponding figure for the Border NUTS-3 region was just 57.5 and was the lowest of all the NUTS-3 regions. Statistical Yearbook of Ireland 133

6 Technical Notes 2012 estimates - preliminary The national accounts estimates for 2012 in Tables 8.2 to 8.7 are compiled on the basis of indicators for the various aggregates and must be regarded as tentative. GDP Gross Domestic Product (GDP) at market prices represents total expenditure on the output of final goods and services produced in the country ( final means not for further processing within the country) and valued at the prices at which the expenditure is incurred, minus the value of all imported goods and services. It is therefore equivalent to the value added generated by the production of goods and services. See GVA below. GNP Gross National Product (GNP) is equal to GDP plus net factor income from the rest of the world and represents the total of all payments for productive services accrucing to the permanent residents of the country. GNI Gross National Income (GNI) at market prices is equal to GNP at market prices plus EU subsidies less EU taxes. This is more commonly described as being equal to GDP plus net primary incomes from abroad. GNDI Gross National Disposable Income (GNDI) is equivalent to GNI plus net current transfers from the rest of the world. It represents the income of the nation from all sources. GVA Gross Value Added (GVA) at basic prices is a measure of the value added generated by the production of goods and services. In the valuation at basic prices output is priced at the value received by the producer less product taxes payable (eg VAT, excise duties, etc) and plus subsidies receivable on products. Total GVA, when valued at market prices, is equivalent to GDP at market prices. Balance of Payments Financial Account and International Investment Position Sign Convention For Balance of Payments purposes, financial account transactions are categorised under two headings Assets and Liabilities for Portfolio Investment, Other Investment and Reserve Assets. For Direct Investment, a directional categorisation is used. Abroad indicates direct investment by Irish investors in foreign companies; direct investment into Ireland is indicated by the heading In Ireland. The sign convention used is: a minus sign in the Abroad and Assets columns means investments or acquisitions abroad (in enterprises, foreign securities, foreign deposits, etc) by Irish investors exceeded their disinvestments or disposals in the period, while an entry without sign (less usual) means disinvestment exceeded investment; an entry without sign in the In Ireland and Liabilities columns means that investment transactions into Ireland or incurrences of liabilities to foreign investors exceeded disinvestment or extinctions of liabilities in the period, while a minus sign (less usual) indicates that disinvestment exceeded investment and liability extinctions exceeded incurrences. In presenting the International Investment Position statistics, stocks of both assets and liabilities are shown unsigned. The net position is calculated as assets minus liabilities; an unsigned (or positive) value means a net asset position of Ireland s 134 Statistical Yearbook of Ireland

7 residents to non-residents while a negative value indicates a net liability position. Under direct investment a negative value for other capital indicates the presence of off-setting disinvestment between affiliated enterprises. Discontinuities The aggregates in Table 8.1 from 1995 to 2012 are compiled on an ESA95 basis. They include FISIM (Financial Intermediation Services Indirectly Measured), which is the output of the banking sector from borrowing and lending, calculated according to EU guidelines. Data for are compiled on an ESA95 basis but exclude FISIM. The Balance of Payments data in Tables 8.8 and 8.9 is obtained from a revamped and strengthened compilation system introduced in Information on this new basis is available from 1998 onwards only and is not comparable with that available for earlier years largely because of the greatly extended financial enterprise coverage and the different presentation basis now used. Statistical Yearbook of Ireland 135

20 Table 8.13 Indices of Gross Value Added per person in each region at basic prices State = 100 Region Border, Midland and Western Border Midland West Southern and Eastern Dublin Mid-East Dublin plus Mid-East Mid-West South-East South-West State Indices of GVA per person at basic prices, 2010 State= Border Midland West Dublin Mid East Mid West South East South West 148 Statistical Yearbook of Ireland

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